Curious coincidences in Cowen's dealings with Anglo
Brian Cowen has two very serious issues to address whether or not he remains leader of Fianna Fáil and whether or not he remains as Taoiseach – and they both relate to Anglo Irish Bank, writes Vincent Browne.
The first of these questions arises from an interview David Drumm, former CEO of Anglo Irish Bank, gave to the Irish Daily Mail and then from an interview Michael Somers, the former head of the National Treasury Management Agency (NTMA) gave to Pat Kenny on RTE Radio on Friday last (14 January).
David Drumm says that at a dinner with members of the board of Anglo Irish Bank in April 2008 Brian Cowen was asked if he had any information concerning what was obviously a previous request from Anglo: to get the NTMA to deposit cash with the bank. According to Mr Drumm, Brian Cowen responded with a familiar epithet that conveyed annoyance with the NTMA's refusal to comply with the request.
Michael Somers was nuanced yet revealing in his radio interview on Today with Pat Kenny. He said: "I have no recollection that [Brian Cowen] told me to put money specifically with Anglo". He went on to explain the NTMA had limits on the amounts it would deposit with any financial institution and the limit it had for Anglo was €40 million. He went into an explanation about how these limits were established without repeating what he had told an Oireachtas Committee in May 2009: he didn't want to place any cash with Anglo because he thought the bank was unsafe.
He also told the Oireachtas Committee that he had come under pressure to lodge monies with Anglo and eventually agreed to lodge just €40m in contrast to the limit set for the Bank of Ireland and AIB which was to the order of €200m to €300m.
In the interview on Friday he gave information which he had not given to the Oireachtas Committee. He said that in 2007 he had received a complaint from either the Central Bank or the Department of Finance (it was clear from his later remarks that it was the Department of Finance where Brian Cowen was minister) that "we were beginning to pull money back from the market and [they were] sort of wondering how far we were going to go and this was not altogether helpful". He said: "Now the pressure did come on us from an official level to do more with the banking system. [It was] very carefully worded, for they were not going to be blamed if anything went wrong - the blame would have been ours".
He sought legal advice from a senior counsel. The senior counsel advised that he should comply with pressure on depositing funds only on receiving instructions in writing from the Minister for Finance.
He said: "We didn't buckle [under this pressure from the Department of Finance] and I made it very clear that if we were to put any money with banks I would require a written instruction from the Minister for Finance, that was the advice and I stuck to it".
This happened in 2007, the year that Anglo Irish Bank realised it was heading for big trouble, starting with a liquidity crisis. Precisely the kind of crisis that the NTMA could have eased had it deposited an amount with Anglo similar to what it was depositing with the two main Irish banks.
So now we know the following:
- in 2007 the NTMA came under considerable pressure from the Department of Finance to deposit more funds with the banks;
- so severe was the pressure that the then head of the NTMA, Michael Somers, sought legal advice on what he should do;
- the NTMA did not buckle under the pressure;
- the bank, perhaps the only bank that needed funds urgently in 2007, was Anglo Irish Bank;
- David Drumm, then CEO of Anglo Irish Bank says Brian Cowen had been asked to help with the NTMA and had expressed annoyance about the obduracy of the NTMA; and
- Brian Cowen denies he made any representations on behalf of Anglo.
The surrounding circumstances suggest David Drumm's recollection of what happened may be more reliable than Brian Cowen's and, if so, Brian Cowen has very serious questions to answer about an attempt to suborn the integrity of a State agency in the interests of people who might be characterised as cronies. I am not saying this is what happened, rather that it seems necessary to investigate whether it did happen or not.
Then there is the business of the "fixing" in the crisis induced by Seán Quinn's amassing of a 28 per cent shareholding in Anglo through contracts for difference and the urgent need in early 2008 to offload as much of that shareholding as possible – without the stock market finding out – lest the Anglo share price collapse. It seems to me that what was done was clearly illegal and that the Regulator's compliance with that illegality took place after an intervention by Brian Cowen. I am not saying Brian Cowen promoted that illegality but again saying that his part, if any, in this is deserving of investigation – by An Garda Síochána, among others.